According to the CEO of Woolworths another Australian consumer electronics retailer is in the same financial position as Clive Peeters was in before they went broke.
Michael Luscombe, who reported sales of $51.7 billion for the year, which was 4.2 per cent more than last year, claims that a certain retailer is carrying a lot of old stock and could well face the same fate as Clive Peeters, which was placed into administration with debts of over $150 Million.
What was not revealed was how Woolworths had obtained the information or whether they had been approached to buy the struggling retailer.
Mr Luscombe forecast that the electrical goods chain would not be the last merchant to go belly up.
“One big retailer that folded recently had stock that was way, way past its fashion date,” he said. “I’ve got a feeling there might be others that fold also . . . you can’t afford to have product sitting around for more than six months.”
Earlier this month Harvey Norman Holdings paid $55M to buy the assets of Clive Peeters, which according to Chairman Gerry Harvey, did include a lot of “dead” stock.
Of the $55 million paid by Harvey Norman Holding for the Clive Peeters assets, $38 million of the purchase price will be used to repay National Australia Bank Ltd, which is Clive Peeters’ sole secured creditor.